Colorado Plans to Lower Minimum Wage in 2010
By Dan Frosch
The New York Times
DENVER – When Coloradoans voted to tie the state's minimum wage to inflation, they were trying to make sure low-wage workers did not fall too far behind the cost of living. But their vote has had an unintended consequence: Colorado plans to lower its minimum wage next year because of falling inflation rates, becoming the first state in the nation do so.
The state's Department of Labor and Employment said Tuesday that it planned to lower the minimum wage to $7.24 from $7.28, after an August federal consumer price index report showed that the cost of living had fallen in the state. A public hearing on the issue is set for next month.
Colorado is one of 10 states where the minimum wage is tied to inflation. The others are Arizona, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont and Washington.
"Colorado's Constitution doesn't give us any leeway," said a state labor department spokesman, Bill Thoennes. "At this point, we don't believe we have the option not to lower the minimum wage."
In 2006, in an effort to keep low-wage workers' salaries commensurate with the cost of living, voters approved a change to the State Constitution that requires the minimum wage to be adjusted with inflation.
As a result of the change, the minimum wage in Colorado has risen along with the cost of living. But this is the first time officials are faced with the prospect of lowering the wage to keep pace with a faltering economy. The federal minimum wage is $7.25 an hour, and it is illegal for most businesses in Colorado to pay workers less than that, so virtually all low-wage workers will see a drop of only 3 cents per hour. But advocates for poor Coloradoans say even that slight drop is enough to hurt people.
"It's not a lot of money, but for the people who are working for minimum wage, it means lot to them," said Rich Jones, director of policy and research at the Bell Policy Center, a progressive research group in Denver that supported changing the Constitution.
Mr. Jones said voters had approved the change because the federal minimum wage had not risen for years and Colorado's inflation rates had remained relatively steady. He said he hoped employers would choose not to lower wages for their poorest workers even though state law will in all likelihood allow them to do so.
Mr. Thoennes said the state labor department was discussing the pending wage decrease with the attorney general's office.
"This being such new territory for us," he said, "we want to make sure we are not making any erroneous assumptions."